Termination of disability to impaired worker upheld

- active participation in a riot.

- loss of a professional license, occupational license or certification.

- commission of a crime for which you have been convicted.

- pre-existing condition.

The plan also provided:

WHAT HAPPENS IF UNUM OVERPAYS YOUR CLAIM?

Unum has the right to recover any overpayments due to:

- fraud;

- any error Unum makes in processing a claim; and

- your receipt of deductible sources of income.

You must reimburse us in full. We will determine the method by which the repayment is to be made.

Unum will not recover more money than the amount we paid you.

Any unpaid premium due for your coverage under this policy may be recovered by us by offsetting against amounts otherwise payable to you under this policy or by other legally permitted means.

The Court’s Decision

The court granted Unum’s motion.

In its decision, the court rejected Mr. Sosinski’s argument that the term “conviction” under the plan was ambiguous because it did not define what a conviction meant. Citing to Black’s Law Dictionary (9th Ed.), it said that to “convict” meant:

To find (a person) guilty of a criminal offense upon a criminal trial, a plea of guilty, or a plea of nolo contendere (no contest).”

(Emphasis added.)

Thus, the court continued, Unum’s determination that Mr. Sosinski’s no contest plea had led to a “conviction” was reasonable.

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In short, the court ruled, the plan did not cover “disabilities caused by, contributed to by, or resulting from” the “commission of a crime for which you have been convicted.” Mr. Sosinski had failed to show that UNUM’s decision to stop paying benefits after concluding that Mr. Sosinski was subject to the criminal conviction exclusion under the plan was arbitrary or irrational.

Finally, the court ruled that Unum was entitled to recover $22,589.52, the most recent 24 month period of overpayment, from Mr. Sosinski, finding that the recovery was permitted under ERISA § 502(a)(3)(B)(ii) because the plan provided that Unum was entitled to recover overpayments.

The case is Sosinski v. Unum Life Ins. Co. of America, No. 13–13576 (E.D. Mich. April 23, 2014). Attorneys involved include: Joseph Dedvukaj, Bloomfield Hills, MI, for Plaintiff; D. Andrew Portinga, J. Michael Smith, Jason C. Miller, Miller, Johnson, Grand Rapids, MI, for Defendant.

FC&S Legal Comment

Another court, examining Unum’s interpretation of the term “conviction” under similar circumstances, has reached the same result.

In Harrison v. Unum Life Ins. Co., No. CV–04–21–PB (D.N.H.April11, 2005), the plaintiff had been convicted of driving while intoxicated (“DWI”) under New Hampshire law and was denied benefits under identical policy language. She sued for benefits, arguing that under New Hampshire law her DWI was merely a “violation” and not a “crime,” as state law defined it. Unum argued that the common dictionary definitions of crime, not the state law definition of crime, should control and that its decision to deny benefits was reasonable. The district court agreed, explaining:

First, Unum’s approach adheres to established contract interpretation principles. The normal rule is that contract language in an ERISA action is to be given its plain meaning…. “Dictionaries of the English language are a fundamental tool in ascertaining … plain meaning.” … Indeed, in Littlefield v. Arcadia Insurance Co., 392 F.3d 1 (1st Cir.2004), the court relied on an American Heritage Dictionary definition of the word “crime” to affirm the defendant’s decision to exclude a plaintiff from coverage under its policy…. There, “crime” was defined as “[a]n act committed or omitted in violation of a law forbidding or commanding it and for which punishment is imposed upon conviction.” That Unum has relied on a similar dictionary definition to interpret the scope of the policy’s criminal act’s exclusion thus appears to be both well-reasoned and supported by substantial, legitimate evidence.

Second, Unum’s interpretation promotes consistency among similarly situated policy holders…. Because it draws its definition from one interpretive source, all policy holders are bound by Unum’s definition. This would not be true if, as Harrison argues, the applicability of the criminal act’s exclusion were to depend upon the way in which DWI is classified under the law of each state where the DWI occurred. Under such a regime, similarly situated claimants would receive different treatment depending upon the state in which the “crime” was committed….

Third, Unum’s interpretation effectuates, rather than undermines the criminal act exclusion’s underlying purpose. The exclusion exists to prevent claimants from passing the costs of illegal behavior on to other policy holders…. Harrison’s interpretation would have the opposite effect. I reject this construction.